The Cigar Lounge That Bureaucracy Almost Killed
· Reason
Jimmy Lewis had dreamt of opening his own cigar lounge since college, when he noticed a gap in the Virginia market: People were driving over an hour from Roanoke to Lynchburg just to buy cigars and sit in a proper lounge. Roanoke, he thought, might have enough cigar lovers to support a lounge of its own.
So, a decade later, Lewis took an enormous risk by moving his family there and trying to turn his dream into reality.
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That dream became the Bison Head Cigar & Lounge in downtown Roanoke. The lounge is comfortable, unpretentious, and full of easy conversation. It is the kind of place where strangers can sit next to each other, light up, and find that the only thing they have in common is "a bundle of rolled-up leaves," Lewis tells Reason.
That, he says, is part of the magic. "I have no idea how many people I've seen walk into cigar lounges alone, sit next to somebody they've never met, and they end up becoming the best of friends."
But Lewis' dream almost did not come true. Starting a small business from scratch is tough, and the countless regulatory hoops the city and state made him jump through made it even tougher.
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As of 2023, the Virginia Administrative Code contains 145,818 restrictions and over 8 million words, making Virginia the 16th-most-regulated state in the country, according to the Mercatus Center. Combined with the Code of Federal Regulations, the state imposes over 1.2 million regulations.
For someone trying to turn a great idea into an actual business, those seemingly abstract numbers are a demoralizing reality. Lewis and his business partner began seriously planning the cigar lounge in 2022. They wrote a business plan, built profit-and-loss spreadsheets, chose furniture, and planned "exactly the way we would want a cigar lounge to be." Lewis moved to Roanoke in September 2024, signed the lease in March 2025, invested his life's savings, and hoped to be open within 60 to 90 days.
Instead, they faced delays and restrictions from the slow, grinding machinery of local government. "The first big step was getting the building permit," Lewis says, "so that we can build in our space legally and with the approval of the city." It took around two months to get permission to build the humidor, which he says is "essentially…a gigantic walk-in closet."
While his generous landlord spared Lewis from having to pay rent as he waited for city approval to open his shop, the lounge could not avoid one of the city's more obscure rules involving signs. Under Roanoke law, businesses must submit a permanent sign permit application, and if the sign is in a historic district—which Bison Head is—a Certificate of Appropriateness is also required.
Before Bison Head moved in, the building had been a dry cleaner that displayed an old, broken sign that was apparently important enough to be deemed historic by a local preservation body connected to the city. Lewis says the city wanted him to put it back up.
"One big issue with that is we're not a dry cleaner," he says. "Another big issue with that is the sign is broken." The sign was old neon, the kind that requires specialist labor to repair. The estimated cost was "upwards of $10,000."
Lewis offered the city a deal. If it wanted the dry-cleaning sign preserved as a historic landmark, Bison Head would keep the sign, bill the city for the roughly $10,000 refurbishment, and let taxpayers know exactly what their money had been spent on. "All of a sudden," Lewis says, "the sign issue went away."
This delay cost them months. When Lewis tried to put an order in for a simple sign with a local manufacturer, the manufacturer warned him not to bother yet. It had recently made one for another downtown business, Lewis recalls, and "it took six months for the city to approve it." He got his sign approved about a month later.
For any entrepreneur, cracking the government's regulatory puzzle is a tall task. If a business happens to sell something that the government deems a "sin," the bureaucracy is even more difficult to navigate. While both cigars and alcohol are separately legal, and adults over 21 may purchase both, cigar lounges face a regulatory structure in Virginia that makes it extremely difficult to let grown adults enjoy them together.
"You cannot bring your own alcohol in here, and we can't sell it or serve it," Lewis explains. "So there's literally just no alcohol, no cigar bars or anything like that, nowhere where you can smoke and drink at the same time." If Bison Head wanted to add bourbon to its menu, it would need to become a restaurant. But that would require complying with a regulatory framework built for restaurants, including a law requiring at least 45 percent of revenue to come from food and nonalcoholic drinks, a hangover from the state's Prohibition-era attitude toward liquor. A new law that takes effect this year removes the ratio entirely for restaurants with at least $48,000 in average monthly food sales, and lowers it for some smaller restaurants. To qualify, Bison Head would still have to make food a major part of the business—but food service brings its own restrictions around indoor smoking, ventilation, and separated spaces.
So Bison Head sells cigars, accessories, shirts, locker memberships, and whatever else it can legally and creatively offer. Lewis and his partner host pop-ups with breweries and other local businesses.
Lewis says that between taxes and other costs, "between 26 and 36 cents of every dollar is going straight to the government." Virginia taxes most tobacco products, including cigars, at 20 percent of the manufacturer's sales price. That money is gone before a small lounge spends on rent, staff, inventory, insurance, utilities, or anything else.
The result is that a local business—trying to create community, employ people, fill a gap in the market, and make an area more attractive—has to spend its early life fighting the state for permission to exist.
Many American entrepreneurs have shared Lewis' experience with navigating the permitting, licensing, zoning, and alcohol rules that often serve as barriers to new businesses. In April 2026, Americans filed more than half a million business applications, but the Census Bureau projects that only 28,479 of them will actually become businesses with payroll tax liabilities within a year.
While the U.S. is one of the easiest places in the world to operate a business, starting a business is incredibly difficult. In the World Bank's most recent "Doing Business" report from 2020, the U.S. ranked sixth overall on the index. However, in the "starting a business" category, the U.S. ranked 55th.
"If people are adults, they can make their own decisions on what to put into their bodies," says Lewis. "The government restricting these businesses does nothing but hurt the economy rather than help it."
America rightly celebrates entrepreneurs, and yet it continues to make their lives needlessly difficult. Bison Head Cigar & Lounge survived, but countless other American dreams are smothered by red tape before they ever become reality.
The post The Cigar Lounge That Bureaucracy Almost Killed appeared first on Reason.com.